Celebrating economic warfare

Memorial Day and Independence Day are honorable summer holidays. But what about Labor Day? A popular 20th century college history text, The Growth of the American Republic, describes the late 19th century relationship between labor and business as "an uninterrupted industrial conflict that frequently broke out into violence and assumed the ominous character of warfare." In the midst of such warfare---the Pullman strike in 1894---President Grover Cleveland made Labor Day a national holiday. By celebrating Labor Day we unwittingly celebrate economic warfare.

While our early and mid-summer holidays honor freedom and the people who made our freedom possible, our end of summer holiday celebrates organized labor. Intimidation, coercion, opposition to freedom of contract, cartel, lobbying for liberty-choking laws like the so-called Employee Free Choice Act . . . these are the tools of union leadership today.

I told a friend who owns a communication consulting firm that I was planning to spend part of Labor Day at my desk working as a silent protest. "Hey, maybe we should rebrand Labor Day," he said. Tongue-in-cheek he added, "Let's recast Labor Day as a day to celebrate birth." Later, I told Foundation for Economic Education President Larry Reed about my silent protest and he too suggested a rebranding effort. He plans on celebrating every other Labor Day as "Capital Day" because labor can only be effective by working cooperatively with capital.

"Any good economist will tell you that as complementary factors of production, labor and capital are not only indispensable but hugely dependent upon each other as well," Reed pointed out. "Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan."

Entrepreneurs and business owners and managers use financial capital---savings generated by profit---to purchase resources, including labor, to generate products and services that people value. Yet labor union leaders frequently treat those who are responsible for deploying capital as adversaries by using their extraordinary Franklin Roosevelt-era legal advantages to extract unnaturally high wages and hefty benefits for their members. I suspect that most Americans know this but, due to nearly a century of labor law, feel powerless to do anything about this situation. We have witnessed the fruits of union coercion in the form of a depleted steel industry, a failing and bloated education system, and the recent collapse of the American auto industry. And who pays the price in the end? People. People that include the rank-and-file who were supposed to benefit from union activity. We'll experience more union-generated problems in the near future as states around the nation come to grips with public pension liabilities.

Maybe then we'll view Labor Day as more than a day to have one last summer barbecue and recognize it for what it is: a celebration of economic warfare.